Sell Solutions, Not Products

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Terry Jones, chairman of Kayak.com and founder of Travelocity.com, began his keynote address with a story about a woman who once came up to him at a party and, upon learning who he was, informed him that she had just made her first online travel reservation.

For years, she said, “I was afraid to make a booking online, because my travel agent told me I’d make a mistake. But today I did it, and it was easy. I felt like Dorothy in The Wizard of Oz when she found out there wasn’t really a wizard — just this little man behind the curtain.”

Jones, who began his career as a travel agent — then, as founder of Travelocity, did as much as anyone to drive that profession to near-extinction — was making the point that virtually the entire global consumer market has embraced e-commerce, and so people use it constantly. For retailers, this requires building digital relationships that aren’t just a matter of paying specialized attention to some shoppers in some channels.

“It’s a self-service world,” he said. “People shop online. They look online to get the information they’ll need when they go to the store. They use a mobile device to get yet more information while they’re in the store. It’s all getting so complicated that the old four-P matrix — product, place, price and promotion — has changed to add a fifth P, personal.”

Service = understanding
The key to personal service, he said, is data, and this holds true not only in the online world but in all modes of commerce. He illustrated this point neatly with photos he’d taken, during a recent trip to Morocco, of shops in the souk in Rabat. “They’re sort of like the Internet,” he said. “Everybody has an identical size store, you don’t know how deep a store is until you get into it, there’s a lot of overlap in product selection between one shop and the next and a lot of them are selling commodities, so they have to compete on price.”

Jones focused his attention on three nut sellers. Two of them were doing slack and sporadic business while a third — in an identical space with identical products — enjoyed a steady stream of traffic. As Jones watched, he realized this was because the third nut vendor clearly knew his customers. He knew which kinds of nuts they liked to buy and in what quantities, and he saved the best nuts for his biggest buyers.

But it’s not just about personal service: It’s about omni-channel service that is sophisticated, shopper-specific and, as Jones put it, spot-on. “We’re dealing with two basic facts,” he said. “One, there is no longer such a thing as the salesperson who knows everything — data has to be in databases. Two, consumers have zero time: You make ’em wait, you lose ’em.”

To keep pace, retailers must constantly re-evaluate and adjust what they do — a point Jones underscored with a quote from Gen. Eric Shinseki, former U.S. Army Chief of Staff and now Secretary of Veterans Affairs: “If you don’t like change, you’re going to like irrelevance even less.”

“Businesses don’t necessarily become obsolete. Business models become obsolete,” Jones said, using his own experience as an example. “It used to be, if people wanted to go somewhere, they called a travel agent and the travel agent called the airlines. Now that’s been short-circuited: People go direct, and over the last 20 years, 10,000 travel agencies have gone out of business.”

Stages of the digital relationship
According to Jones, a digital customer relationship goes through six stages: attraction, curiosity, exploration, learning, trust and, finally, transaction. The transaction, if successful, can cause the customer to return, deepen the relationship — even rekindle one that has gone stale.

The attraction stage begins with a search — and what the typical customer is seeking is not a product but a solution, which means it’s important to learn to think like the customer. “When I go to Home Depot to buy a drill, do I do it because I want a drill? No. I do it because I want [to make] a hole. I need a drill. There’s a difference.”

In other words, they’re out there looking for a solution that enables them to meet their goal, and you have to provide the beacon that attracts them. This has implications for IT: Complex tagging of products is mandatory, and it needs to be user-driven (again, think holes, not drills). Another implication: You can’t afford failure at this stage. It’s impossible to get a second chance from somebody who doesn’t know you exist.

Curiosity
Curiosity is satisfied by giving people what they can’t easily get in the physical world — generally speaking, information. In a hardware store, you can’t click on a drill and see a diagram of the motor or an instructional video on how to use it. You also can’t get a list of helpful ways to coordinate this product with the last dozen things you bought or almost bought. Therefore the IT department must be able to connect a retailer’s transitional and CRM databases. You also need to save searches, abandoned carts — everything, really.

During the exploration stage, help customers by keeping it simple; Jones returned to this point over and over. In his view, a confusing page is a bad page. Providing lots of information in small, easily digestible pieces greatly enhances the learning stage: Where possible, use photos and side-by-side comparisons. People trust what they hear from others more than what you tell them, so solicit and publish reviews.

Jones offered a telling pair of statistics to bolster this last point: Only 36 percent of online retailers offer reviews, but of those that do, 90 percent say they are effective. Besides, he said, “The conversation about your product is going on with or without you.”

Conversion
You reach the end stage of this elaborate courtship when the visitor makes a purchase. Here too, Jones advocated making life for the consumer as simple as possible. “Who cares how they pay?” he said. “All that matters about payment is that the more types of payment you accept, the higher your conversion rate is going to be.”

Jones made it clear that none of this has to do with strategy for a particular channel, but must be incorporated across all channels. Once you make the sale, you have a digital relationship; if you can bring that person back for additional purchases, you have a customer.